30 Jun 2014

Equity markets are not quite in the
doldrums but support from global economic data is not exactly consistent. India
meanwhile has been waiting for the new government’s first budget and
confirmation of a commitment to restoring growth. Over two weeks, the Nifty has
shed 33 points for a loss of 0.4%, closing at 7509 after trading in a range of
3%. Average daily trading volumes have been subsiding from recent highs in the
$4-5bn range towards the low $3bn level. Nifty futures closed today
at a premium of 1.5% to cash.

The Indian government has initiated some fairly
aggressive moves to attack food inflation with set minimum export prices for onions and potatoes which have
already led to improved supply in Delhi and Mumbai. States have been advised to
allow free movement of fruit and vegetable and de-list these items under
restrictive agricultural marketing laws so that the ability of middlemen to
hoard will be reduced. Losses on diesel fuel have been reduced to Rs1.6 per
litre; if monthly increases continue and the Rupee holds, this means that the
price of diesel can be decontrolled by September. The new Petroleum and Natural Gas Minister,
addressing a conference in Moscow, has said there will be new policies aimed at
encouraging FDI in exploration and development with a view to getting
international operators to take an interest again.

13 Jun 2014

This
week the World Bank cut its forecast for global economic growth this year from
3.2% to 2.8%, pointing specifically to weaker prospects in the US, Russia and
China while warning emerging markets to prepare for the liquidity effects of
the Fed raising US interest rates. The latest Iraq crisis has pushed crude oil
prices to recent highs, giving markets pause for thought. Meanwhile, India’s
equity markets sold off slightly, with the Nifty shedding 41 points to close
0.5% down at 7583 after trading in a range of 2.3%. Average daily trading
volumes of $4.5bn sustained the elevated post-election level; FIIs remained
buyers of a net $263mil in cash equities while domestic investors sold $482mil.
Stocks in decline outnumbered advances by three to two and the points’
contributions showed tight concentration. Four stocks, representing 19% of
Nifty market cap added 77 points and five, representing 22% of market cap took
away 87 points. Volatility was fairly stable with the India VIX trading in the high teens, adding two
points on the week, closing at 18. Index futures closed at a premium of 1.2% to
cash.

About Himalayan Fund NV

The Himalayan Fund N.V. is an investment company with its primary objective to generate long-term capital gains for shareholders by investing in India.

This blog shares with you interesting, weekly news about the Indian economy. It provides insights about the financial situation in India and its market. The team of Himalayan Fund offers knowledge about investment opportunities relating to India.

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